Q80 Chairman: I am sorry we have kept
you waiting a bit beyond the advertised time. We will run a little
bit beyond one o'clock as a result but some of my colleagues have
to leave at one o'clock for other engagements, so they will sneak
out, I am afraid, at one; I apologise for that, there is no discourtesy.
We are anxious to give you a fair crack of the whip and our earlier
witnesses, as it was, were frustratingly cut short on the questions
asked on a number of issues, so I apologise for that. Can I begin,
as always, by asking you to introduce yourselves for the record,
please?

Mr Taylor: Thank you. My name
is John Taylor, I am the chief executive of Acas.

Ms Clews: My name is Susan Clews,
I am the director for Acas in the North West Region and I chair
Acas's strategy group on smaller firms.

Q81 Chairman: Thank you. We have
had a paeon of praise to you all morning, which has been remarkable
and wonderful, motherhood and apple pie is a great thing and you
clearly support it robustly, and all our witnesses have. I would
like a bit of a harder edge than this; have you made any assessment
of your actual contribution in statistical and factual terms to
the health of the UK economy?

Mr Taylor: If I could try and
answer that in two kinds of ways. In terms of hard statistical
evidence there is a lot of information around about costs, around
individual conciliation, for example. £30 million was used
as what we save the Exchequer, but in addition to that there are
various sums bandied about in terms of GDP that we actually save
employers, and indeed employees, in terms of reducing the length
of the process. On collective conciliation we know, for example,
that if we save a one day strike on the London Underground the
London Development Agency estimate that to be about £35 million
of GDP that we actually save for the London economy. What is much
more difficult to put a cost on is the value of the advice and
information that we actually give out. It is very difficult to
disaggregate the effect of our intervention from a whole range
of other sources. The other thing of course is that we regularly
sample our customers to find out what they actually think of what
we do.

Q82 Chairman: What do you mean by
your customers in that context?

Mr Taylor: Employers and employees.
For example, with the employment tribunal system, which is an
incredibly stressful activity for all sides, we come out with
remarkably high customer satisfaction levels of 90 odd per cent,
so we are pretty clear in our own mind

Q83 Chairman: Do you see a difference
between big and small companies in that respect?

Mr Taylor: It is right across
the piece, Chairman. The majority of our customersI will
use that term, it is a much better one than respondents, I think

Q84 Chairman: I wanted to make sure
you were not just referring to businesses when you said customers,
that is all.

Mr Taylor: It is generally businesses
because that is primarily who we deal with, but of course we have
a helpline which deals with a million telephone calls per year
and that is roughly 50-50 between individuals and employers.

Q85 Chairman: The evidence we have
received only struck two discordant notes with us, and one of
them is the large number of people who could not spell "its"
and I need to send a copy of Eats Shoots and Leaves, but
the other one was a very strange comment from one firm of solicitors
who said "We note in particular the reference [in our terms
of reference] to how Acas contributes to increased productivity,
an odd approach to measuring the work of statutory bodies expressly
charged with promoting the improvement of industrial relations."
Presumably you would see, as I hope you woulda leading
question if ever there was onethat improving industrial
relations makes a direct contribution to increased productivity?

Mr Taylor: Indeed. We would argue
very strongly, and this is the argument that we put to Government
in terms of trying to justify our budget, that getting it right
in the workplace is a real means of driving up productivity. On
the one hand you have a Government which spends £6 billion
on skills acquisition, and really we are about skills deployment
and making the best of their time in the labour force. We would
say there is a massive link between the two.

Chairman: Thank you very much. Lindsay
Hoyle.

Q86 Mr Hoyle: Thank you, Chairman.
Obviously, the man from Number 11 has set about the Comprehensive
Spending Review for 2007 and of course the DTI has got to go under
the microscope. Part of that will relate to yourself at Acas with
the funding you receive; does this worry you?

Mr Taylor: There are other problems
I would prefer to have than dealing with this one. As an organisation,
we have been in the process of continuous improvement for a number
of years, and what we have done is looked, using jargon, at smarter
ways of working. We have looked at new technology, for exampleten
years ago websites did not existand we are attempting to
get through to individuals using technology. We have looked at
smarter ways of working, so many of our staff work from home.
We have looked at ways of moving work to staff rather than staff
to work to equalise the workload, we are in the process of reducing
our estate, so we have got in hand a continuous process of trying
to contain costs and provide value to the taxpayer, but obviously
with a cut of this size and a reduction in the workforce of this
size it is going to be a painful time for us over the next few
years to make sure that we have got a commensurate response and
continue to provide a good service. Perhaps I could ask Sue to
comment on the way in which we have gone about it at grassroots
level.

Ms Clews: What we are trying to
do really is to get the most impact with the money that we have
got, so we are looking, for example, at smaller firms and how
we can get to as many of the 1.2 million businesses as there are,
and that may not be through direct face to face contact, which
is a luxury we really cannot afford to use very much. We will
look at enhancing our website and, as John has mentioned, particularly
the helpline where we have increased the opening hours, the training
of our staff so they are able to offer a wide range of support
in employment matters, and also looking to work with intermediary
bodies as well so we have developed much better links with people
like FSBthe Federation of Small Businessesthe Chambers,
accountants, so that through a certain amount of Acas expertise
we can lever a bigger impact.

Chairman: Moving now to equality and
diversity, Roger Berry.

Q87 Roger Berry: Thank you. Acas
provides advice on promoting equality and diversity in the workplace,
and in your submissions you talk about enhancing those services.
You do refer to equality strands that are currently not covered
by existing commissions, which I think is commendable, but it
does beg the obvious question, which you have probably heard before
this morning, what is the relationship between Acas and the existing
commissions and how do you anticipate the relationship with the
new Commission on Equality and Human Rights in the future? Who
is doing what, basically?

Mr Taylor: Before I answer that,
when we talk about equality and diversity we are really talking
about the labour forcewhat has happened to the labour market
and what has happened to Britain's workforce, which has completely
changed from what it was 50 years ago. Employers do not think
in nice little silos, that this is an equality and diversity issue,
employers think how can I actually run my business. With the existing
commissions what we have tended to do, because we have no compliance
duties because we have no enforcement powers, we have tended to
go to employers and talk about equality and diversity in business
termsthis makes business sense, to access as many people
in the labour force as you can, if you want to be acceptable to
everybody in the community, to customers, you yourself need to
represent the local population; it is very much the business case.
I have to say that the existing equality commissions have welcomed
our involvement in that area because we are promoting good practiceyou
have heard this morning about the fact that people actually believe
what we say because we have not got a particular axe to grind.
With the new Equality Commission we are talking to DTI officials
and, of course, once the new chair and chief executive are appointed
we will talk in more detail but, roughly, we would see that same
kind of relationship continuing.

Q88 Roger Berry: Can I ask a specific
question. If we are talking, for example, about disability equality,
do you advise employers of the reasonable adjustments that they
are required to make or should be obliged to make if they are
considering employing a disabled person? Do you have the expertise
at Acas in that area?

Mr Taylor: We have a team of equality
advisers, about 25 people across GB, who I would say, yes, have
that expertise, but the generality of our workforce do not have
that depth of knowledge and, where appropriate, we would refer
on to the DRC. It is getting that relationship right.

Q89 Roger Berry: You do not see any
risk of duplication again?

Mr Taylor: No, we see ourselves
essentially as complementing what is there. It is essentially
the private sector which has difficulty getting its head around
some of these concepts of equality and diversity, and what we
have attempted to do, as I said a little bit earlier, is to put
that in the context of business sense and demystify the area.

Roger Berry: Thank you very much.

Q90 Judy Mallaber: What representations
did Acas make on the new commission and all of the legislation,
and in general how do you see your role in making submissions
to Government?

Mr Taylor: As you will appreciate
from this morning, we have an Acas council which goes across the
spectrum, so there are some issues where it is highly unlikely
we would get an Acas council agreement on a particular line, but
actually there are many more where there is a broad consensus.
Essentially, we would see ourselves representing common sense
and pragmatism, if you like, drawing from the fact that we have
been operating with businesses for 30 years and we would offer
advice to Government as to whether we thought this would actually
operate in principle. It is very unusual, certainly in the time
I have been chief executive, for us to take a political stance
on a particular issue. It would be very unusual for us to take
a political stance on a particular issue and it would be, essentially,
what is the practical impact of what the Government is proposing.
On the Equality Commission we have put broad comments to the Equality
Commissionand I am very happy that the Equality Commission
have sent them to youarguing the business case to learn,
and all the signs are that the new commission wants to be seen
to be much more business-friendly and we would certainly support
that approach.

Q91 Judy Mallaber: The areas on which
you would feel you should make a contribution, are they the areas
where you think you can get an agreement on the Acas board, or
is it that there is a particular category of areas on which you
feel you should be seeking to influence policy?

Mr Taylor: I go back really to
our mission statement which is about improving organisational
performance and improving working life. That is the position of
the Acas Council and our position would be that those things are
mutually inclusive, that if you improve one you should improve
the other. That is the broad driver.

Q92 Judy Mallaber: Is this an area
of work that is likely to be hit particularly by the cuts you
are having to make?

Mr Taylor: As Sue said, we are
having to think again about how we deliver at the front end, if
you like. We have retained capacity in head office in London to
produce codes of practice and to give Government advice. The Council
took the view, rightly in our view, on the part of management,
that this is real high value added that we can actually bring
along to Government policy, not just to DTI, trying to influence
wider policy on training, for example.

Chairman: That actually leads very neatly
to the questions Anthony Wright wanted to ask.

Q93 Mr Wright: Following on from
the question that was asked beforeand you are obviously
aware of those questionsregarding the staffing and the
cuts, are you concerned about the effectiveness of Acas to perform
its duties as it has done for many years with the amount of cuts
that are taking place, and could you also confirm how many jobs
are actually going to go because it was quoted 100 and PCS have
quoted something like up to 160.

Mr Taylor: There are 150 jobs.
What we have tried to do is ensure that our activities around
dispute resolution have been safeguarded, so we have tried to
retain a credible individual conciliation workforce, who also
get involved in mediation, and also retain our capacity to get
involved in collective dispute resolution. That is what we have
attempted to do. In order to balance the books, if you like, we
have had to reduce the amount of what I would call discretionary
activity, advice and information. There are some 26 million employees,
3.1 million employers, 600,000 employers who employ five or more,
and what we have had to scale back a little bit is our ambition
in terms of trying to get closer to SMEs and perhaps workers in
some of those vulnerable sectors, which are cleaning et cetera.
We are a people-centric organisation and there is a limit to what
you can do through a website once you get into human relations
difficulties, but what we have tried to do is come up with a commensurate
response depending on whether it is a rural part of the country
or an urban part.

Ms Clews: That is right. In my
area, for example, in the North West, we will look for opportunities
where we think we can have a big impact, like the Liverpool Capital
of Culture bid where there is going to be massive growth of employment
in the area. We would look at working with other organisations
to make sure that new jobs that are created are good ones, wherever
possible, with high standards of work, so we look for areas where
we can have the most impact. That is not to say that we will forget
the very small firms, so we will try and work with people like
Business Links, the Chambers of Commerce, so that for one day's
work of an Acas person we can reach as wide an audience as possible.
We are also trying to look more creatively at how we deliver our
services as well, so that might involve things like talking to
much larger groups of people than we have traditionally done,
having events spread wider throughout the day, but at the moment
it is important to recognise that our staff are working extremely
hard still to deliver a very high quality service to customers.

Q94 Mr Wright: Will they have to
work any harder because of these cuts, or will there be a loss
of effectiveness do you think?

Ms Clews: Because they are highly
professional staff who are driven very passionately by the mission
to improve employment relationsstopping a tribunal case
going to tribunal is not merely a paper exercise for our teams,
so they will do everything they can do and are doing at the moment,
particularly in the transition as we lose some staff on early
retirement and training. They are working extremely hard and we
are also being more flexible in how we deal with cases to make
sure that the level of service that is provided, particularly
in individual conciliation, is proportionate to the complexity
of the case, so something like a race discrimination case would
very likely have face to face contact with all the parties, perhaps
joint meetings, some real hands-on conciliation, whereas a dispute
over a holiday pay claim might well be dealt with purely over
the telephonethat would be the likelihood of how it was
handled.

Q95 Mr Wright: Do you not think it
is inevitable that there will be an increase in employment tribunals?

Ms Clews: I do not think that
is necessarily the case because we will do our utmost to make
sure that the service we offer is appropriate to that case, particularly
with the very short period cases where they are over more factual
points of evidence. We will point those issues out to the parties
and we are confident that we will still achieve a high level of
settlement in those cases. It is something we will monitor and,
clearly, if there is any reduction in service then we would reflect
that to the Acas Council and to DTI.

Q96 Mr Wright: Have you got plans
to bring back any of the staff who have taken voluntary retirement
on short term contracts?

Ms Clews: We have not got plans
to do that. It is an option that we would consider in very, very
rare circumstances, and the ones that spring to mind would be,
for example, if they were working with a particular customer,
perhaps following a collective conciliation to improve employment
relations, it might be reasonable for them to do a few days work
to finish off that particular piece of workrelationships
that have been established would be hard to replicate with another
colleague. That is the main situation I see. The only other area
where I believe we are actively considering it would be if we
had a large influx of equal pay cases where we needed to conciliate,
and that would stretch our resource considerably so that might
be one of the options. It would only be one option that we would
look at, it is not a widespread practice at all.

Q97 Chairman: I wonder if, as a point
of fact afterwards in writing, you would let us have a note of
your staffing in regional offices, broken down with the numbers
in each officethe annual report does not give that breakdownso
we have an indication of where the staff are working geographically.

Mr Taylor: Yes.

Q98 Mark Hunter: My question is about
staffing as well. Given the current situation where the public
sector generally has to make savings, do you think that Acas should
be exempt from that situation? If you do, perhaps you could explain
why and if you do not and you think it is reasonable that Acas
should similarly be expected to make efficiency savings, what
would you think would be an appropriate reduction in the grant
in aid that Acas receives from Government?

Mr Taylor: We certainly should
not be exempt from good governance or from the taxpayer getting
value for money, and that is why I was talking about the way in
which we are using new technology, for example. We are a very
odd organisation because at one level we do not want any repeat
businesshopefully, we resolve your problem and you do not
actually come backbut on the other you know that the demand
is almost infinite because as regulation increases the complexity
of working life increases. What we have attempted to do is increase
our output if you like for the same amount of money. I am not
in denial about the impact that this staff cut will have on the
organisation, and even with the best, smartest, cleverest way
of responding you simply cannot lose 150 qualified, frontline
staff and continue to provide the same kind of service, so we
have looked very long and hard at how flexibly we can deal with
that. What kind of reduction in budget would be reasonable? Certainly
the argument that we have put to Government is that we have taken
our fair share of cuts and if you were to reduce our budget by
another substantial amount then we would have to think very seriously
about stopping doing things. At the moment our response is we
have been able to continue with the broad remit of services, I
do not think we could manage with another significant cut.

Q99 Mark Hunter: If you had to stop
doing things, as you put it, what areas of the service would be
under threat immediately?

Mr Taylor: We would look at whether
or not technology could help, and certainly around advice and
information we could do a lot more in terms of enhancing the website.
What that would do is it would drive us off our mission; in particular
it would mean that vulnerable employers, in particular SMEs who
do not necessarily have the time or the intuition to go on the
website and really need people contact, they would not get that,
similarly, vulnerable workers, if we were forced to scale back
our helpline or reduce our standards et cetera. There is
a limit to what we can do, given the statutory responsibility
we have got around providing the conciliation service.

Chairman: We will be exploring charging
a little later on in the session, but not now. We will move now
to individual dispute resolution. Mike Weir.